Volatility continued as key benchmark indices trimmed intraday gains in mid-morning trade. The barometer index, the S&P BSE Sensex, fell below 25,000 level after hitting record high above that mark in morning trade. The market breadth, indicating the overall health of the market turned negative from positive. The Sensex was up 850.57 points or 3.56%, off close to 620 points from the day's high and up about 485 points from the day's low. Key benchmark indices surged today, 16 May 2014, after the trends of Lok Sabha elections showed that Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) is set to form the next government at the Centre. The NDA was leading in 316 seats and was declared winner in one seat out of 533 seats for which trends and results were available so far. The Congress-led United Progressive Alliance (UPA) was leading in 75 seats. There are a total 543 Lok Sabha seats. Investors are hoping that the BJP-led government will be better at getting things done and more business-friendly than the current Congress-party-led coalition government. The BSE Mid-Cap index was up almost 2%.
Auto stocks rose across the board with Tata Motors, Mahindra & Mahindra, Maruti Suzuki India and Hero MotoCorp hitting record high. Ashok Leyland hit 52-week high.
The market surged in early trade after the early trends of Lok Sabha elections showed that Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) was leading in the elections. The Sensex and the 50-unit CNX Nifty, both, hit record high. A bout of volatility was witnessed as key benchmark indices trimmed gains after extending initial strong gains in morning trade. The Sensex further trimmed intraday gains in mid-morning trade.
Indian stocks may see high intraday volatility today, 16 May 2014, as trends and actual results of wins by candidates/parties are announced during the course of counting of votes for the recently concluded Lok Sabha elections. The counting of votes began at 8:00 IST today, 16 May 2014, and results are expected by today itself.
Investors are hoping that when the results of the Lok Sabha elections are out today, 16 May 2014, a stable government which will complete its full term of five years in office comes to power. A party or a pre-poll alliance will need 272 MPs to form government at the Centre, which is a simple majority in 543-member Lok Sabha. Investors are expecting measures for revival of the economy, business-friendly policies and good governance from the new government that comes to power after the elections. Investors expect policy measures from the new government to put India on a high-growth path on a sustainable basis.
The BJP in its Lok Sabha polls manifesto has promised more business-friendly policies if the party comes to power after elections. The BJP has said that measures for the revival of the economy are its priority if the party comes to power after elections. India's GDP growth has slowed to a decade low of below 5%. The GDP grew 4.7% in Q3 December 2013.
The market sentiment was boosted by data showing that foreign funds made purchases of Indian stocks on Thursday, 15 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 934.94 crore on Thursday, 15 May 2014, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was up 850.57 points or 3.56% to 24,756.17. The index jumped 1,470.03 points at the day's high of 25,375.63 in morning trade, a record high for the index. The index gained 365.94 points at the day's low of 24,271.54 in opening trade.
The CNX Nifty was up 264.15 points or 3.71% to 7,387.30. The index hit a high of 7,563.50 in intraday trade, a record high for the index. The index hit a low of 7,264.40 in intraday trade.
The BSE Mid-Cap index was up 144.03 points or 1.89% at 7,784.13. The BSE Small-Cap index was up 60.56 points or 0.78% at 7,851.68. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market turned negative from positive in mid-morning trade. On BSE, 1,179 shares fell and 1,157 shares rose. A total of 108 shares were unchanged.
Among the 30-share Sensex pack, 26 stocks gained and only four fell. ICICI Bank (up 9.02%), Sesa Sterlite (up 8.3%) and Axis Bank (up 8.14%) edged higher from the Sensex pack.
Auto stocks rose across the board. Mahindra & Mahindra (M&M) rose 6.38% to Rs 1,174.05 after hitting record high of Rs 1,180.55 in intraday trade.
Tata Motors was up 4.7% at Rs 460 after hitting record high of Rs 464.20.
Maruti Suzuki India rose 5.15% to Rs 2,226.10 after hitting record high of Rs 2,315 in intraday trade.
Ashok Leyland jumped 9.04% to Rs 27.75 after hitting 52-week high of Rs 28.30 in intraday trade.
Hero MotoCorp jumped 7.1% to Rs 2,624.80 after hitting record high of Rs 2,775.05 in intraday trade.
TVS Motor Company gained 1.06%. Bajaj Auto gained 4.81%.
Kalindee Rail Nirman (Engineers) jumped 10.51% after the company reported net profit of Rs 12.65 crore in Q4 March 2014 as against net loss of Rs 1.29 crore in Q4 March 2013. The result was announced after market hours on Thursday, 15 May 2014. Kalindee Rail Nirman (Engineers)'s net sales rose 59.33% to Rs 100.09 crore in Q4 March 2014 over Q4 March 2013.
The company reported net loss of Rs 7.11 crore in the year ended March 2014 as against net profit of Rs 8.09 crore in the year ended March 2013. Net sales declined 1.26% to Rs 253.99 crore in the year ended March 2014 over the year ended March 2013.
In the foreign exchange market, the rupee edged higher against the dollar after the trends of Lok Sabha elections showed that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) was leading in elections. The partially convertible rupee was hovering at 58.86, compared with its close of 59.29/30 on Thursday, 15 May 2014.
Indian government bond prices edged higher after the trends of Lok Sabha elections showed that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) was leading in elections. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.7073%, lower than its close of 8.781% on Thursday, 15 May 2014. Bond yields and bond prices move in opposite direction.
The India Meteorological Department (IMD) on Thursday, 15 May 2014, said that the southwest monsoon is likely to set over Kerala on 5 June 2014, with a model error of plus/minus 4 days. The normal date of onset of the southwest monsoon in India is 1 June. Advance of southwest monsoon over Andaman Sea normally takes place around 20 May with a standard deviation of about one week. Low level cross equatorial monsoon flow has started appearing over south of Andaman Sea and adjoining south Bay of Bengal, the IMD said in a statement. The monsoon is likely to advance over Andaman Sea during next three days, the IMD said. Past data suggests absence of any one to one association of the date of monsoon advance over Andaman Sea with the date of monsoon onset over Kerala or that with the seasonal monsoon rainfall over the country, the IMD said.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
Asian stocks fell on Friday after a report showed China's bad loans jumped the most since 2005 and the yen strengthened amid concern about global growth. Key benchmark indices in South Korea, China, Japan, Taiwan, Singapore and Hong Kong were down 0.08% to 1.79%. Indonesia's Jakarta Composite rose 0.38%.
Non-performing loans in Asia's biggest economy rose by 54 billion yuan ($8.7 billion) in the three months through March to 646.1 billion yuan, the highest level since September 2008, according to data released by the China Banking Regulatory Commission yesterday. Bad credit accounted for 1.04% of total lending, up from 1% three months earlier.
Trading in US index futures indicated that the Dow could fall 8 points at the opening bell on Friday, 16 May 2014. US stocks fell a second day on Thursday, with the Dow Jones Industrial Average sinking the most in a month, as investors continued to sell small-cap shares and Wal-Mart Stores Inc. forecast profit that missed estimates.
Economic data showed industrial production in the US unexpectedly declined in April, held back by a plunge in utilities as temperatures warmed and a broad-based decrease in manufacturing. Manufacturing, which makes up 75% of total production, decreased 0.4%. That contrasted with a higher-than-forecast reading on the Fed Bank of New York's gauge of regional manufacturing, which climbed to 19.01 this month, from 1.29 in April. Labor Department data showed the fewest Americans in seven years filed applications for unemployment benefits last week, while a separate report indicated the cost of living in the US rose in April by the most in almost a year.
Federal Reserve Chairwoman Janet Yellen yesterday said the US economy has further to go to achieve full health and predicted small businesses will play a vital role in the recovery.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 17-18 June 2014. The Fed on 30 April 2014 said after a monetary policy review that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends. The FOMC also reduced monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve.
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